Financial Sector Development and Reform, South Africa, Phase I

Despite of being a G-20 member, South Africa needs effective coordination of regulators to achieve sound risk management and to address gaps and overlaps in the existing regulatory structure. The authorities also face considerable challenges relating to enhancing financial inclusion. Constraints in access to financial services are critical elements underlying the country's persistent income inequality and modest growth. In order to address these issues, the program builds on two main pillars: 1) financial sector stability, regulation and integrity and 2) financial inclusion.

The overall objective of the South Africa Financial Sector Development and Reform Program is to assist the Government in strengthening financial stability and improving financial inclusion. Advancing the soundness and inclusion of the financial sector will support the development needs of the economy as well as South Africa's medium-term growth and poverty reduction goals. As such, the aim is to achieve compliance with financial regulations (Basel III), to increase retail deposits, to raise the share of adults that are banked, to increase the SMEs share with a loan and to increase the share of SME lending over total lending.

Financial Stability Pillar:

Strengthened financial institutions resolution regime and crisis management system-

Sound deposit insurance system, contributing to financial stability and protecting depositors-

Strengthened market conduct regulation and supervision of financial institutions-

Strengthened regulatory and oversight capacity for capital markets development-

Strengthened framework against money laundering.

Financial Inclusion Pillar:

Strengthened legal, regulatory, and policy framework for enabling the development of innovative retail payment instruments and payment infrastructures-

Improved access to credit for companies (SMEs), by establishing a credit information service, and improving the SME support schemes-

Strengthened legal framework for movable asset lending and establishment of an online centralized movable asset registry-

Improved legal and institutional framework for debt rehabilitation and personal insolvency responding to the challenge of over-indebtedness.

Risultati principali attesi:  

Financial Stability Pillar:

Financial institution insolvency/resolution bill drafted-

Deposit insurance scheme designed-

New financial consumer protection regulations/guidelines drafted-

Supervisory tools developed for market conduct supervision-

Draft regulations for enabling environment-

Revised Financial Intelligence Centre Act (FICA) drafted, including a tiered anti-money laundering framework-

Financial Inclusion Pillar:

Support for the development and expansion of bank outlets, mobile payments and remittances-

Promote the establishment of a credit information service and support schemes for companies-

Improve the legal and regulatory framework for secured transactions-

Propose a design for a new centralized and computerized nation-wide registry for security interests in movable assets-

Develop the legal and institutional framework for personal indebtedness.

Fase 1 01.06.2014 - 30.06.2018   (Completed)